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Chen v. H.B. Restaurant Group, Inc.

United States District Court, S.D. New York

January 9, 2020

SHIQIU CHEN and CHANGREN ZOU, on behalf of themselves and others similarly situated, Plaintiffs,
H.B. RESTAURANT GROUP, INC. d/b/a Hunan Balcony, SG 98 RESTAURANT GROUP, INC. d/b/a A New Saigon, J & K RESTAURANT GROUP, INC. d/b/a Szechuan Gourmet d/b/a Szechuan Garden, JOHN DOE CORPORATION, INC. d/b/a Szechuan Garden, JENNY SHUCHEN WU, and ZUN BI CHEN, Defendants.



         Plaintiffs Shiqiu Chen and Changren Zou, on behalf of themselves and similarly situated individuals, brought this action to recover unpaid wages, overtime wages, and other damages under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (the "FLSA"), and the New York Labor Law, N.Y. Labor Law § 650 et seq. (the "NYLL"). Defendants H.B. Restaurant Group, Inc. d/b/a Hunan Balcony, SG 98 Restaurant Group, Inc. d/b/a A New Saigon, J&K Restaurant Group, Inc. d/b/a Szechuan Gourmet d/b/a Szechuan Garden, John Doe Corporation, Inc. d/b/a Szechuan Garden (collectively, the "Corporate Defendants") are restaurants doing business at various periods in Manhattan. Plaintiffs allege that Jenny Shuchen Wu ("Defendant Wu") and Zun Bi Chen ("Defendant Chen") (collectively, the "Individual Defendants") are the owners and operators of the Corporate Defendants.

         A three-day bench trial was held on May 15, 16, and 29, 2019. Thereafter, the parties each submitted proposed findings of fact and conclusions of law. (Dkt. 129, 133.) The Court observed the demeanor and testimony of the witnesses during trial and has carefully considered the parties' submissions and arguments.

         In accordance with Federal Rule of Civil Procedure 52(a), this Decision and Order constitutes the Court's findings of fact and conclusions of law.[1] For the following reasons, the Court finds that Plaintiffs have not met their burden of proof to establish any basis for liability against Defendants. Accordingly, the Clerk of the Court is respectfully directed to enter judgment in favor of Defendants and close the case.

         Procedural History

         The Court will briefly recount the relevant procedural history. The Complaint was filed on March 17, 2016 (Dkt. 1) and the First Amended Complaint ("Complaint"), now the operative pleading, was filed on December 29, 2016. (Dkt. 68.) The matter was initially assigned to the Honorable Lorna G. Schofield, U.S.D.J., and the Honorable James C. Francis IV, U.S.M.J. (Dkt. 1.) The Court granted several extensions of time, resulting from the substitution of Defendants' counsel and delays by Plaintiffs in complying with discovery deadlines. (Dkt. 36-37.) On September 20, 2016, the parties consented to the jurisdiction of Judge Francis for all purposes pursuant to 28 U.S.C. § 636(c). (Dkt. 41.) The case was reassigned to the undersigned on November 1, 2017 upon Judge Francis' retirement.

         Defendants filed their Answer on September 21, 2016.[2] (Dkt. 43.) The Court entered a Civil Case Management Plan and Scheduling Order on November 9, 2016. (Dkt. 62.) Defendants filed a motion for partial summary judgment but withdrew the motion about two months later. (Dkt. 80.) Discovery closed on November 10, 2017, and the parties submitted a Joint Final Trial Report on December 18, 2017. (Dkt. 95.) Following several adjournments, a pretrial conference was held on September 18, 2018. (Dkt. 101.) Trial dates were selected for March 2018, but then adjourned to May 15 and 16, 2018. (Dkt. 118.) An additional day of trial was added for May 29, 2019. (Dkt. 121.)

         Following trial, Plaintiffs submitted Proposed Findings of Fact and Conclusions of Law on September 2, 2019 ("Pl. Br."). (Dkt. 129.) Defendants submitted their Proposed Findings of Fact and Conclusions of Law on October 14, 2019 after receiving two extensions to do so ("Del Br."). (Dkt. 133.)

         Findings of Fact

         During three days of trial, Plaintiffs called two witnesses: Changren Zou (T. 6-114) and Shiqiu Chen.[3] (See T. 114-208.) Defendants called one witness: Jenny Shuchen Wu.[4] (See T. 217-290; T2. 3-36.) All witnesses testified through a Chinese-language interpreter.

         While FLSA and NYLL trials often focus on factual disputes regarding employees' hours, the nature of the work performed, or employers' qualifications for coverage under the relevant statutes, the instant trial instead focused on whether Plaintiffs actually worked for Defendants at all. The primary factual issue before the Court, as shown below, was whether and when Plaintiffs worked for a restaurant owned by Defendant Wu - the predicate to finding liability under the FLSA or NYLL. The Court will begin with a summary of Plaintiffs' testimony, followed by Defendant Wu's testimony.

         A. Plaintiffs' Employment

         1. Plaintiff Zou

         Plaintiff Zou worked for two restaurants called Hunan Balcony and A New Saigon, both located at 2596 Broadway, New York, NY 10025 ("2596 Broadway") at different time periods. He also worked for Szechuan Garden, located at 239 West 105th Street, New York, NY 10025 ("239 West 105th Street"). (T. 6-7.)

         Zou's work began at Hunan Balcony. From July 1, 2012 to December 31, 2012, he largely delivered food orders and performed other ministerial labor (e.g., cutting cardboard, cleaning the sidewalk and wiping windows). (T. 8, 10, 12.) He first learned about the job opening from a friend, and then spoke with the manager there named "Ah Pao," who told Zou he could begin working.[5] (Id.)

         Zou testified that he worked at Hunan Balcony for six days per week from 11 a.m. - 11 p.m. (Id.) His rate of pay was $50 per day; he was informed of this rate orally and told that he could receive tips from customers. (T. 9.) He testified that there was no "time recording system" to track his hours. (T. 15.) Instead, to collect his bimonthly salary, Zou would sign "a piece of paper" that the manager would retain, and then he would receive his salary. (Id.) He would keep any cash tips, and then the "front desk girl" would calculate any tips received through online platforms or credit cards and pay him at the end of each day. (T. 16.)

         Zou identified Defendant Wu as the "general manager" who was "in charge of everything" including his salary and assignment of work. (T. 11.) Defendant Zun Bi Chen was also a "boss," who was often at the front desk managing the restaurant. (T. 11-12.) During his time at Hunan Balcony, Zou testified that Wu would sometimes send him to Szechuan Garden at 239 West 105th Street "to go there and help out with deliveries" when that restaurant was busy, which was typically three or four times per week. (T. 11, 19.) He further testified that during his time working between both restaurant locations, his base salary was the same and always paid through Hunan Balcony. (T. 20.)

         Plaintiff Zou stopped working for Hunan Balcony by December 31, 2012. Then, sometime in April 2013, he received a phone call from Ah Pao who asked him to come work part-time at Szechuan Garden on 239 West 105th Street. (T. 21-22.) Zou worked there only one or two days per week, and performed only food deliveries. (Id.) His hours on those days were typically 12 p.m. - 10 p.m. with a one-hour lunch break and short break for dinner, which he believes he recorded through a mechanical time-punching machine. (T. 21-22, 26, 27.)

         Zou testified that Wu was a "manager" at Szechuan Garden and had responsibilities for payment and organization. He testified that he believed that Defendant Chen was also a manager at Szechuan Garden, though he did not give Zou instructions directly. (Id.) As at Hunan Balcony, Zou received bimonthly installment payments and signed a piece of paper in order to receive his payment, typically from Wu. (T. 27.) Zou testified that he did not execute an employment agreement at the start of the relationship. (Id.) Unlike Hunan Balcony, however, he was unsure of his rate of pay: "I think they pay me by the hour. I don't really know."[6] (T. 28.)

         Plaintiff Zou's testimony is unclear regarding exactly when he stopped working for one or two days per week at Szechuan Garden. He was never asked the question directly, but instead mentioned that "something happened to one of my [children] so I didn't work and I went home and I took care of my child." (T. 29.)

         From November 20, 2014 through April 30, 2016, Plaintiff Zou worked for A New Saigon, located at 2596 Broadway - a different restaurant at the same address that Hunan Balcony previously occupied. (T. 30, 35.) He began there the same day that the restaurant opened. (Id.) According to Zou, Defendant Wu, Defendant Chen and Ah Pao were all present at A New Saigon during his employment there. (T. 31.) Wu was "managing" and responsible for "giving out pay" though she was apparently not there every single day. (T. 32.)

         Most of Zou's work at A New Saigon involved delivering food, although he also performed other tasks, such as cleaning. (T. 31 His daily work assignments were generally given by Ah Pao. (Id.) Zou testified that he was paid $50 per day and worked approximately six days per week from 11 a.m. to 11 p.m. with short breaks for lunch and dinner. (T. 34, 36-37.) Once again, he did not sign any agreement at the start of his work but was verbally notified of the rates and hours. (T.33-34) The restaurant had no punch-clock for tracking his time. (T. 37.) And again, as with Hunan Balcony and Szechuan Garden, Zou was asked to sign a piece of paper that he did not read, and that the restaurant would keep, before receiving his bimonthly pay. (T. 38, 44.) Tips were handled in the same manner as well; Zou would retain any cash tips without reporting them, and then would meet with the person at the front desk at the end of each night to collect any tips paid by credit card or online provider. (T. 39-40.)

         During the same period that Zou worked at A New Saigon (November 20, 2014 through April 30, 2016), Wu or Ah Pao would occasionally send him to handle deliveries for Szechuan Garden at 239 West 105th Street when that location was "too busy." (T. 42.) The trial testimony on this arrangement was inconsistent and far from clear; at one point, Zou indicated that he stopped working at Szechuan Garden at the end of 2013, but at other points, he indicated that between 2014 and 2016, he worked for both locations "seven days a week." (T. 47.) He stated that he did not receive a separate paycheck from Szechuan Garden from the days when he worked there other than the monies he received from A New Saigon, which he claimed encompassed his work for Szechuan Garden. (T. 104-105.) Zou stopped working at A New Saigon when the restaurant closed. (T. 50.)

         Zou admitted that he was unaware of the formal corporate entities or ownership interests in the restaurants. (T. 84-85.) Rather, he only recognized the names of the restaurants in Chinese and recognized the individuals who appeared to be managers, though he did not know with certainty who owned the businesses. (Id.)

         On cross-examination, defense counsel elicited testimony from Zou's deposition that was inconsistent with his testimony at trial. For instance, while testifying at trial that he received only $50 per day, working six days a week with only short breaks for meals (T. 9), on cross-examination, Zou testified to a substantially different arrangement: "They paid me, yea. They told me about my pay [from the beginning]. I was paid $1, 430, worked five full days, and I take two half days off a week." (T. 63; Zou Deposition at 8, line 20.) Oddly, Zou seemed to forget that he ever was deposed in the case, and claimed that he did not recognize defense counsel.[7] When asked by defense counsel at trial if he recalled meeting him at the December 7, 2017 deposition, Zou stated: "I forgot. I don't remember. ... I totally forgot. I don't even recognize you." (T. 52.) Plaintiffs' counsel, however, confirmed that his client in fact had been deposed by defense counsel. (T. 53.) The Court does not find Zou's lack of memory of being deposed by defense counsel to be credible.

         2. Plaintiff Chen

         In approximately November 2014, Plaintiff Chen passed by A New Saigon on 2596 Broadway - which had not yet opened - "[b]y happenstance" and inquired whether they might be looking for workers. (T. 116) Chen left his phone number and received a call from "Lau Gui," who invited him to begin working there on the opening day of the new restaurant.[8] (T. 120) When he arrived to begin work, Chen was greeted by Ah Pao as one of the managers and also came to know "Boss Chen" (that is, Defendant Chen) and Defendant Wu as other supervisors. (T. 117.) Plaintiff Chen also identified ...

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